Arlene Dickinson’s perspective on small business start-ups
While some might be worried about investing in a jittery market, Arlene Dickinson feels that the entrepreneur economy is about to take off.
A few tips from professional investor, Arlene Dickinson
Financial markets are jittery. Investors are anxious. The prospects for economic growth are wobbly. Consumer debt is at record levels. Unemployment is steadily increasing.
Given that these are just some of the factors framing our lives these days, it’s reasonable to conclude it’s not just a bad time to start a new business, it’s a rotten time.
After all, few ventures have greater risk attached. And against the backdrop of such pervasive uncertainty, those risks are further magnified.
Or are they?
According to Arlene Dickinson, a celebrity entrepreneur, panelist on Dragon’s Den and author of the autobiographical business guide, Persuasion: A New Approach to Changing Minds, that’s not necessarily true. She insists it’s important to look beyond the obvious limitations of current economic circumstances.
“There’s a widespread sense of how terrible conditions are right now for entrepreneurs. But I actually think we’re entering an entrepreneur economy. And it’s about to really take off.”
Among the things driving that shift, she says, are historically low start-up costs, an unprecedented ability to inexpensively manufacture products offshore, and the ability to widely and cheaply market and distribute products and service over the internet.
The internet also allows start-up companies to do things like design logos and graphics, and comparison shop when sourcing materials.
During a period of economic distress, furthermore, it’s possible to find space at a lower cost – and to lock it in for a longer term lease. Those who elect to base their business at home, on the other hand, have powerful, compact technology available to do so.
The emergence of new markets is also something that start-up ventures can benefit from. They are often much more agile and responsive than larger, more bureaucratic companies. And they don’t carry the same geopolitical baggage in many cases either.
On top of that, Ms. Dickinson claims that large corporations and their perpetual state of upheaval have lost much of their appeal for talented, enterprising individuals.
“The evidence shows that a growing number of recent graduates and others want more control over their lives and their future. They want the certainty of self-direction,” she says.
The issue of control also extends to financing for new ventures. She anticipates that as investors continue to demonstrate that they are “sick of public markets,” individuals, online crowd-funding and a new breed of venture capitalists are emerging the replace the reliance on traditional equity and debt markets.
“People feel best about investing in other people, at the end of the day,” she says. “The issue of trust and authenticity is becoming paramount in these decisions. And it’s often linked with people you know already.”
Overall, she suggests that people are much better informed about business than ever before, and that understanding also contributes to their willingness to engage, and back smaller ventures earlier on.”
Ms. Dickinson also points to one of the core tenets in her book, a principle she believes has contributed to the personal success of her marketing firm, Venture.
“Whatever the size of your business, you should be looking for the win/win, the mutual benefits and risks that define the relations,” she says. “As a small business, that’s something that can contribute to rapid growth – and a solid reputation.”
For those who decide to take the leap and start a small business, Ms Dickinson has a couple of caveats.
“Probably the most common mistake is underestimating the amount of capital that’s required to grow – and also the time it takes,” she says.
Another common shortcoming among those who start-up new companies is the ability to communicate effectively.
“All too often it’s all in their head and they just don’t know how to get it out, how to ensure it’s well-understood by others. It’s imperative to be clear about brand and marketing.”
And that’s something that’s true whatever the economic backdrop.
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